Building a portfolio of great stocks that have market-beating potential isn’t hard. There are plenty of great options on the market that continue to excel, even during this bout of volatility.
Here’s a look at two of those stocks with market-beating potential to add to your portfolio today.
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Option #1: TD Bank
Canada’s big bank stocks are among the best, most defensive picks on the market. They can offer great dividends, strong growth potential and a stable, recurring revenue stream that continues to bankroll both.
That’s part of the reason why prospective investors looking for stocks with market-beating potential will want to look at Toronto-Dominion Bank (TSX: TD).
TD is the second largest of the big banks. It’s also one of the big banks that has invested heavily over the years into growing a large presence in the U.S. market.
That U.S. presence, which is the primary growth focus of the bank, now stretches along the East Coast from Maine to Florida.
Let’s not forget the domestic segment at home. In Canada, TD boasts a massive branch network that generates the bulk of the company’s revenue. More importantly, it’s a secure, mature segment that generates reliable revenue.
That revenue helps to cover TD’s quarterly dividend. As of the time of writing, the yield on that dividend comes out to a respectable 3.63%. The bank also provides investors with handsome annual bumps to that dividend.
In summary, TD is the big bank for investors seeking stocks with market-beating potential. The bank has outperformed much of the market year to date while continuing to offer a robust yield and investing in growth initiatives.
This makes the stock a great addition to any long-term portfolio.
Option #2: Enbridge
When it comes to stocks with market-beating potential, it’s hard not to think about Enbridge (TSX: ENB).
Enbridge is one of the largest energy infrastructure companies on the planet, operating a diverse mix of pipelines, gas distribution, and renewable energy facilities.
The company is best known for its pipeline network, which generates the bulk of the company’s revenue. The pipeline network transports both crude and natural gas across Enbridge’s massive network, connecting refineries and storage facilities.
Part of the appeal stems from sheer necessity and the volumes hauled by Enbridge. The company transports one-third of all North American-produced crude and one-third of the natural gas needs of the U.S. market.
In other words, the segment operates like a toll-road network, generating a recurring and stable source of revenue. And because it operates like a toll road, the volatile price of the commodity hauled doesn’t impact Enbridge’s bottom line.
While that makes Enbridge an incredibly defensive pick, it’s also not the only reason to consider this as one of the stocks with market-beating potential.
Enbridge also operates a renewable energy business with facilities located across North America and Europe. Those facilities are regulated, backed by long-term contracts that generate a recurring revenue stream, not unlike a utility.
Enbridge also operates one of the largest natural gas utilities in North America. This generates yet another regulated, recurring revenue stream that is backed by long-term contracts.
In total, Enbridge’s diversified mix of businesses generates ample revenue to invest in growth and pay one of the best dividends on the market. As of the time of writing, that dividend works out to a yield of 5.58%.
Factor in 30 years of annual increases and Enbridge’s 11% year-to-date gains, and you have one of the best stocks with market-beating potential.
What are your stocks with market-beating potential?
While markets continue to show prolonged volatility, defensive picks like TD and Enbridge prove that there are stocks with market-beating potential and returns.
Together, they both offer a blend of defensive income and resilient growth, exactly what investors need in today’s uncertain environment.
